Residential property in India faces a 6 percentage point deficit between typical 3% rental yields and current borrowing expenses, forcing buyers to rely heavily on capital appreciation to break even. Over a 15-year horizon, equity indices have outperformed residential real estate by 2.5 to 4 percentage points, creating a massive divergence in compounded wealth. While typical Indian households park roughly 50% of their net worth in real estate, high-net-worth individuals allocate only 20% to 22% to avoid liquidity traps. Experts stress viewing real estate as a tool for diversification rather than primary wealth generation.
Key points
Real estate should function as an asset for diversification and wealth preservation rathe…: Real estate should function as an asset for diversification and wealth preservation rather than the primary vehicle for capital growth.
Long-term equity compounding provides a more reliable hedge against inflation than physic…: Long-term equity compounding provides a more reliable hedge against inflation than physical housing despite regular stock market volatility.
Hidden costs such as stamp duty, maintenance, registration, and loan interest significant…: Hidden costs such as stamp duty, maintenance, registration, and loan interest significantly dampen real estate returns compared to initial investor expectations.
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For many Indian households, owning a house is an important financial milestone. Some go a step further, buying a second or even a third property, often viewing real estate as a safe investment that will appreciate over time. But does owning more property necessarily translate into greater wealth?
At a panel discussion titled “Are you invested enough in real estate?” at the ET Wealth Expo 2026, Vishal Dhawan, Founder undefined Ajay Sharma, MD of Valuation undefined and Vivek Rathi, National Director – Research at Knight Frank India, discussed how investors should allocate their wealth between physical property and financial assets such as equities, bonds and mutual funds.
A key takeaway was that investors often underestimate the actual cost of owning property while overestimating its returns. Excessive exposure can also restrict liquidity, limit wealth creation and expose households to concentration risk.
Real estate versus equities: The return gap can make a big difference
Vishal Dhawan pointed out that investors should compare the total cost of owning property with its actual appreciation rather than simply looking at the difference between the purchase…
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